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CORRECT ANSWER NEEDED ASAP FOR ALL!! THANK YOU!! BiliBala Inc. needs some new equipment. Now the company can choose to either lease or purchase the

CORRECT ANSWER NEEDED ASAP FOR ALL!! THANK YOU!!

BiliBala Inc. needs some new equipment. Now the company can choose to either lease or purchase the equipment. The purchase price is $80,000. The equipment has a 5-year life after which time it will be sold at $10,000. The company could borrow money at 6%, and faces a 35% tax rate. The equipment can be depreciated at a CCA rate of 30%. For leasing, the manufactory will charge a pre-tax lease fee of $15,000 per year. What is the net advantage to leasing?

options:

0

$13,019

$2,000

$6,458

$4,760

2

Sam spent $200,000 on acquiring new equipment, which can be classified as a Class 10 asset for CCA purposes. He finds that the CCA rate is 30%. Calculate CCA for the year 2. (The first-year rule should be applied in this question)

options:

$119,000

$51,000

$70,000

$35,700

$30,000

3.

West Wood Ltd. has performed very well over the past decades. Its stock price is as high as $2,500 per share. The firm has 3 million shares outstanding. after seeing many firms benefit from stock splits, the management group plans to announce a 20-for-3 stock split. What will the stock price be after the split?

options:

$375

$500

$700

$1,200

$1,667

4.

Safety Roofing Inc. has kept a target capital structure of 0.6 for a long time. Recently, the company further adopts a residual dividend policy. To acquire a higher market share, the firm will need $2,500 for new investments. If the company could generate after-tax earnings of $2,700 this year, how much dividends can shareholders expect to receive this year?

options:

$1,340

$1,365

$1,138

$1,563

$1,500

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